This years major accomplishments are in the following areas: 1) Anterior and posterior polarity of the inner ear is established by retinoic acid signaling (manuscript submitted). The dorsal-ventral patterning of the vertebrate inner ear is thought to be dependent on signals emanating from the hindbrain. However, the requirement for establishing the anterior-posterior (A-P) polarity of the vertebrate inner ear is not known, and studies in chicken suggested that it is independent of signaling from the hindbrain. Based on our studies in chicken and mice, we propose that A-P polarity of the inner ear is established by a wave of retinoic acid (RA) signaling that passes through the ear primordium during early stages of embryogenesis. The anterior otic region receiving a low level of RA signal, develops into neural-sensory fates. In contrast, the posterior otic region receiving high or prolong level of RA, develops into mostly non-sensory structures. Thus, these early patterning events provide the bases for the asymmetry of this organ that is critical for its functions. 2) Reciprocal antagonism between Fibroblast growth factors and retinoic acid signaling patterns the semicircular canals of the inner ear (manuscript in preparation). The ability of vertebrates to detect angular head movements is dependent on the three orthogonally arranged semicircular canals and their sensory organs, cristae, in the inner ear. The anterior and posterior canals develop from a vertical epithelial outpouch of the rudimentary ear, whereas the lateral canal arises from a horizontal outpouch. During development, opposing epithelia in two center regions of the vertical canal pouch fuse and resorb, leaving behind two tube-like canals at the rim that are joined in the center by a stalk known as the common crus. Using gain- and loss-of- function approaches in the developing chicken inner ear, we show that RA synthesis in the prospective common crus domain is required for its formation, and this RA signaling antagonizes Fgf signaling, which promotes semicircular canal formation via upregulating Bmps (Bone morphogenetic proteins) at the rim of the canal pouch. On the other hand, too much Fgf signaling also inhibits common crus formation by down-regulating the RA synthesizing enzyme, Raldh2, and upregulating Bmp2 expression in the center region of the canal pouch. Thus, a balance of Fgf and RA signaling sculpts the canal pouch into anterior and posterior canals and the common crus of the developing chicken inner ear. 3) Distinct contributions from the hindbrain and mesenchyme to inner ear morphogenesis (manuscript published) The establishment of the primary A-P axis of the chicken inner ear is thought to be independent of the hindbrain because inverting the A-P axis of the hindbrain adjacent to the ear primordium does not appear to affect the ears A-P polarity. However, further analyses indicate that the shape of the cochlear duct is affected when the segment of the hindbrain adjacent to the inner ear is misaligned or inverted along its A-P axis. In contrast, these manipulations have little effects on vestibular patterning, and the shape of the anterior and posterior canals and their ampullae are dependent on signaling from mesenchymal tissues surrounding the developing inner ear. The posterior canal and ampulla acquire anterior canal characteristics when surrounded by anterior otic mesenchyme. Likewise, anterior canal and ampulla take on the shape of posterior canal and ampulla when the otocyst is surrounded by posterior mesenchyme. Taken together, these results indicate that multiple neighboring tissues are required for conferring positional identity of vestibular and auditory components. 4) Role of Bone morphogenetic proteins on cochlear hair cell formation: analyses of Noggin and Bmp2 mutant mice (manuscript published). During embryogenesis, expression domains of Bone morphogenetic proteins (Bmp) and their antagonist, Noggin, are often found juxtaposed to each other during formation of many tissues including the cochlear duct, somites and cartilage. Noggins main function is thought to antagonize and regulate the level of Bmps. In the developing cochlear duct, both Bmp4 and Noggin are expressed in overlapping domains adjacent to the prospective auditory sensory organ, the organ of Corti. In addition, Bmp2 is expressed in the nascent sensory hair cells within the organ of Corti. Knockout of Noggin resulted in increased rows of sensory hair cells in the cochlea suggesting that Noggin normally antagonizes Bmp activities in promoting hair cell production. To address which Bmp(s) is being regulated by Noggin in producing the correct number of hair cells, we generated inner ear-specific deletion of Bmp2 in the nascent hair cells. We showed that Bmp2 conditional knock out mice have normal hair cell formation and hearing. Therefore, Noggin is likely to regulate hair cell numbers in the cochlea by antagonizing activities of other Bmps such as Bmp4 and Bmp7, expressed adjacent to the prosensory domain.